Cost Reduction Program - Exploration Driller

Jim Cowan
Partner, Heavy Industry
Heavy Industry
Cost Reduction
November 20, 2023
cost reduction p.a
tenders completed
supplier reduction

Client Problem

The client was a national exploration drilling company that had supply and services requirements that were not under contract and had not competitively tendered their requirements in many years. The Client also had pressure from the board and shareholders to improve profitability.

Caliba Solution

Caliba was engaged to complete a cost reduction opportunity assessment across the client’s operational inputs, which included a review of all forecast goods and services requirements, current contracts, price benchmarking, and a specifications review. Numerous stakeholder sessions were held to validate the forecast requirements and identified cost reductions.

The assessment identified a number of areas where the client could reduce costs through better procurement, including rig parts, equipment hire, pipes & casing, drilling fluids, industrial hardware, and hoses & fittings.

The Caliba team worked with the client’s operations and maintenance teams to complete over 15 tenders across the business.

The outcome of the project was a reduction in operating costs by $2.59m per annum, and an 82% reduction in the number of suppliers. Caliba also assisted the client in the development of the new supply contracts and ongoing management of the contracts to ensure the client realised the cost reductions on an on-going basis.

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